Prima facie use of duty-free materials supported waiver of pre-deposit and stay of recovery in export duty dispute.

Poly-cotton, poly-zari and polyamide were found in the exported garments through test reports, which undermined the Department's prima facie contention that duty-free material procured from the 100% EOU had not been used in manufacture. On that basis, the tribunal treated the assessee as having established a prima facie case for interim relief and waived pre-deposit of duty and penalties. Recovery was stayed pending disposal of the appeals.

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Issues: Whether pre-deposit of duty and penalties should be waived and recovery stayed pending appeal on the basis of a prima facie case.

Analysis: The goods test reports indicated that poly-cotton, poly-zari, and polyamide were used in the manufacture of the exported garments. On that basis, the Department's case that the duty-free material procured from the 100% EOU was not used in manufacture was found not sustainable at the prima facie stage.

Outcome: Pre-deposit of duty and penalties was waived and recovery was stayed pending the appeals.

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